City health insurance changes approved by 1 vote

Oct. 1--RACINE -- The City Council approved the controversial changes to the city employee health plan by one vote on Monday. The proposed changes for retirees were amended but were passed as well.

Before passage of the 2020 budget, the council will still need to decide how city contributions to health savings accounts will be distributed.

The proposed changes provoked an outcry from city employees when they were announced at the beginning of September. Employees representatives, including Todd Hoover from the Racine Police Association, released statements that called the proposal "unconscionable" and "disappointing and bewildering." Mayor Cory Mason countered that "other options are worse."

The day before the council was scheduled to vote two weeks ago, about a hundred city employees -- a mix of firefighters, garbage collectors from the Department of Public Works, Parks and Recreation employees, office staff, police officers, and others -- protested outside of City Hall. Representatives also spoke before the council during the Sept. 19 meeting when the council voted to defer on the proposal.

No one was looking forward to voting.

"This is not a pleasant day," said Alderman Q.A. Shakoor II of the 8th District. "But the fact of the matter is we cannot continue to operate as we have in the past."

Ongoing opposition

At Monday's meeting, Alderman Jen Levie of the 5th District said that she would not support the proposed changes because of employees' representatives were not included in the process.

"They understand the situation the city faces and feel that some cuts would be unavoidable. They wanted to be part of the discussion and they were completely cut out of this process. This is completely unacceptable," said Levie. "I believe there is nothing fair nor equitable about this proposal and how we got here."

Aldermen Sandy Weidner and Carrie Glenn placed the blame for city's financial situation in part on the city's pay structure, which was modified in 2017, according to the recommendations Carlson Dettman Consulting, a Middleton-based firm.

Weidner said the council was told the changes would help with retaining "engineers and nurses" so she was dismayed that the top 28 earners have seen their salaries increase from $9,000 to $32,000 since 2017.

"If they (referring to the highest-earning city employees) have to pay $3,000 or $6,000 for their deductible, that's no sweat off their back," said Weidner. "We need to go back to the drawing board and figure out how to reduce the deficit created by them."

Alderman Glenn put it more succinctly.

"We need to chop from the top," she said.

What passed

The bulk of the proposed changes, which will affect current employees, were passed by a vote of 8 to 7.

Those who voted to approve the changes were Aldermen Jeff Coe, Mollie Jones, John Tate II, Q.A. Shakoor II, Trevor Jung, Natalia Taft, Jason Meekma and Melissa Lemke. Those who voted were in opposition were Aldermen Tracey Larrin, Jen Levie, Sandy Weidner, Maurice Horton, Carrie Glenn, Mary Land and Henry Perez.

For 2020, city employees will only have one plan available thats sets employee contributions at 7.5% ($55 a month for an individual and $145 a month for a family) with an in-network deductible of $3,000 for the individual plan and $6,000 for the family plan. The maximum out-of-pocket costs would be $4,000 for an individual and $8,000 for a family.

After the deductible, the new plan requires a $200 emergency room copay that would be waived if they're admitted, a $75 urgent care copay, a $49 telemedicine copay, a $30 primary care office visit copay and a $60 specialist office copay. At the City Wellness Clinic, they would have to pay a $4 copay. Any preventative treatment would be covered 100% without a deductible.

Instead of a separate prescription drug deductible, drug payments will contribute to the overall deductible. Once the deductible is met, the copay is determined by what tier the medicine is set at: Tier 1 is $10, Tier 2 is $35, Tier 3 is $50 and Tier 4 is $150.

What changed

The proposed changes to the retirees' benefits were altered before passing.

The proposal would have removed Medicare B reimbursements for spouses, capped Medicare Part B reimbursement for retirees at $135.50 a month and did not permit retirees to use the City Wellness Employee Health Center at 2333 Northwestern Ave. Suite 114.

Alderman Trevor Jung of the 9th District made two amendments: one of the changes was to make it so the spouses would continue to be covered and they would still be able to use the Wellness Center.

The amendments passed 13 to 2, with Aldermen Levie and Weidner voting in opposition.

The overall changes to retiree benefits passed 9 to 6. Aldermen Coe, Jones, Tate, Horton, Shakoor, Jung, Taft, Meekma and Lemke voting in approval. Aldermen Larrin, Levie, Weidner, Glenn, Land and Perez voted in opposition.

To be determined

For current employees, some of the additional out-of-pocket costs will be mitigated by health savings accounts that would include a contribution from the city at the beginning of the year.

The proposed city contributions to the HSAs would be $1,500 for a family if the employee lives within the city and $1,000 if they do not; an employee with an individual plan would receive $1,000 if they live within the city, $750 if they do not.

Since the council had a full agenda that evening, Alderman Natalia Taft of the 13th District offered a motion to pass a resolution creating the HSAs and aside $750,000 to distribute among the employees, but she wanted to postpone discussion of how those funds would be distributed. Alderman Mollie Jones proposed bumping that sum up to $915,000.

Some aldermen argued it would be better for city employees to know how much they'll receive in advance so they can prepare for the start of the year. The mood shifted when City Administrator Jim Palenick made a suggestion for distributing the funds that had not been previously considered.

Palenick stated that in light of the discussion about how the changes placed a greater burden on lower-wage employees, the council could consider distributing more HSA funds to those employees and fewer to the higher-income employees.

Ultimately the council voted unanimously to establish the HSA's with a dollar amount of $915,000 to contribute to employees' accounts and a deadline of November 1 to approve how those funds will be distributed.

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